Gyeongbuk’s Innovative ‘First Step Pension’: A Game-Changer for Youth Financial Security

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[Herald Economy (Andong)=Reporter Kim Byung-jin] Lee Cheol-woo, a candidate for governor of North Gyeongsang Province, announced on April 9 a pledge to establish the “10,000 KRW (about $7.50) Hope: Gyeongbuk First Step Pension.”

At a press conference that afternoon at the People Power Party’s Gyeongbuk provincial office, he described the plan as a long-term asset-building program in which the provincial government and each city and county would each contribute ₩10,000 (about $7.50) per month on behalf of children aged 0 through 18 for 19 years. The funds would be managed on a long-term compound-interest basis.

If implemented, the total principal accumulated per person would be ₩4,560,000 by their 19th birthday (about $3,420).

Assuming an annual compound return of roughly 5%, that amount would grow to about ₩7,600,000 (about $5,700) by age 19.

Lee said that if the balance is left invested without withdrawals or additional contributions, it could grow into a retirement asset of roughly ₩56,000,000 (about $42,000) by age 60.

There are approximately 320,000 residents aged 0–18 in the province, and the annual provincial funding required for this pension would be around ₩38,000,000,000 (about $28,500,000).

“We already provide various supports such as childbirth subsidies and childcare allowances,” Lee said, “but the Gyeongbuk First Step Pension would add a new, Gyeongbuk-style investment-welfare model that links child welfare, youth self-sufficiency and retirement security. We’ll start in Gyeongbuk and seek to build a new national asset-formation welfare model for South Korea.”